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Why GBPUSD is extending its Losses?

GBPUSD is extending its losses today ahead of the release of
US unemployment claims data. Seems like yesterday’s Bank of England statement continue
to weigh on the pair. The Bank of England trimmed the wage growth forecast
yesterday for 2014 from 2.5% to 1.25% and also said that the pace of wage
growth would help deciding the timing of interest rate increase. US Department
of Labor is going to release the unemployment claims data today at 8:30 AM EDT.
Economists are expecting the jobless claims to increase by 18K from 289K to
307K. If the data beats the economist’s expectations, the pair might revive from the current support however of the data misses the expectations we might see some more losses in the pair.Investors seems like already betting on upbeat unemployment data and locking gains by selling the pair.

GBPUSD : Daily Chart

On the daily chart, the pair declined below the key support
at 1.6694 and currently testing another key support at 1.6655. If the pair
continues to decline, the next nearest support would be at 1.6551. Also seems
like the 200 day SMA is acting as support to the pair. A break below the 200
day SMA will definitely confirm the bearish trend on the pair and in my opinion
investors would now be closely looking at the wage growth data. So the pair
will continue to follow the bearish trend until the wage growth meets the central
bank’s expectation resulting in an interest rate hike.